Properties in Jordan make modest gains in 2012

Rental rates in Jordan were mostly unchanged year-on-year during 2012, compared with 2011, according to the Q4 2012 report by leading UAE-headquartered property management company Asteco.

During 2012, apartment rental rates for one and two bedroom apartments remained unchanged whereas increased demand for three-bedroom units in areas such as Abdoun, Um-Othainah, Al-Rabiah, Der Ghabar and 4th Circle resulted in an average increase of 2%. 4th Circle remained the most sought after area, with a three-bedroom apartment costing JOD 16,500 per annum.

“The demand was predominantly coming from local residents as well as some expatriates looking for medium to large sized apartments in the range of 250 to 350 square metres,” said Hussein Safadi, General Manager, Asteco.

The government announced a new policy for energy sources including gas, solar, oil and electricity which caused increases in sectors such as transportation, construction and raw materials.

This had a direct effect on developers who were forced to review their pricing strategy which in turn resulted in apartment sales prices to increase by 10 and 11% in areas such as Der Ghabar and 4th Circle, while the rest of the market gained 5 to 7% on average, year-on-year to the end of 2012.

Average sales prices per square metre in Abdoun and 4th Circle were the most expensive at JOD 1,100, while Al-Rabiah remained the most economic at JOD 850 per square metre.

Low demand coupled with increasing supply has resulted in decreasing average office rental rates of 3% compared to the previous quarter. Although there is some interest from local companies the annual average rate of decline in most areas ranged between 2 and 5%. The exceptions were Um-Othainah which saw average rental prices go up by 2% and Medina Monawarah where rents slipped 11% during 2012.

A stagnant office sales market has resulted in no change for sales prices, with the exception of Wadi Saqrah which witnessed an average sales price increase of 3% during 2012.